Former Norpac to pay produce suppliers $4.5 million under settlement

By Caroline Salls

Pittsburgh, Aug. 20 – North Pacific Canners & Packers, Inc., formerly Norpac Foods, Inc., requested court approval of a $4.5 million settlement reached with an official committee of co-op member produce suppliers, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the District of Oregon.

The company said Norpac is owned by about 140 member growers who are under contract to sell and deliver crops to Norpac.

Some of the member growers filed notices of agricultural produce liens, asserting liens in the North Pacific debtors’ inventory and the proceeds from the sale of that inventory to secure payment of amounts allegedly owed to them under their contracts. Some of the members also filed proofs of claim in Norpac’s bankruptcy cases in connection with 2019 crops delivered to the company.

Under North Pacific’s plan of liquidation, the members would not receive any payment from the debtors’ estates on account of any of their claims.

In addition, the company filed a lawsuit on April 17 against 10 members, seeking a ruling that the defendants’ various claims were subordinated to payment in full of all other claims under organization documents, that the lien claims were invalid and should be disallowed and that the members’ claims should be valued at zero.

The company also asked the court to declare that the defendants breached their member contracts.

Under the proposed settlement, the company’s estates will pay $4.5 million on account of 2019 crop deliveries by all members.

Salem, Ore.-based Norpac Foods is a grower-owned cooperative focused on processing frozen vegetables and fruit. The company filed bankruptcy on Aug. 22, 2019 under Chapter 11 case number 19-62584.

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